The recent Netflix (NFLX) earnings report provided a lift to their shares, but since fallen to test their lows. The daily and weekly charts are indicating an inflection point as NFLX is aligning near the daily and weekly TDST Support. Last Friday, Netflix recorded a TD Buy Countdown “13” under the daily TDST Support at 327.35. To give some semblance of bullishness, NFLX must close above 327.35 today. But what is probable is for NFLX to finish off the TD Buy Setup on the weekly charts, currently on bar “8” this week. If any selling in NFLX can stay contained above the weekly TDST Support level at 300.85, there is a good chance upside momentum can be regained once the weekly “9” records a TD Buy Setup. Breaking under 300.85 will signal more aggressive selling and force a look at the monthly charts, which just price flipped bearish last month. The TDST Support for the monthly is at 241.38.
Choppy market action still prevails for the indices. There will be two market moving news this week with the Fed meeting on Wednesday and the jobs report this Friday. The 4 hour S&P 500 (SPX) chart holds the cards for the week, and if the markets continue to modestly sell off, the weekly Nasdaq and Russell 2000 may provide selling exhaustion in 3-4 weeks from now.
S&P 500 (SPX) SHORT TERM OUTLOOK: BEARISH
Switch back to neutral if SPX closes above 1878.53.
The short term action will be characterized as sideways unless the SPX can travel below 1816.29 between now and this Wednesday. If the 4 hour TD Buy Setup stays active, a “9” count will record on Wednesday, right around the time the Fed will make their policy announcement. If the “8” or “9” count is above the TDST Support level at 1816.29, expect the Fed to work their magic powers to test the upper ranges.
S&P 500 (SPX) SHORT/INTERMEDIATE TERM OUTLOOK: BEARISH
Neutral if SPX closes above 1879.55.
S&P 500 (SPX) INTERMEDIATE/LONG TERM OUTLOOK: BEARISH
Neutral if SPX closes above 1857.62 on Friday, May 2nd.
Two market tales – One has the SPX and the Dow both in volatility squeezes, readying a coiled-spring breakout effect. On the other side, both the Nasdaq and the RUT are in a modest downtrend. Thoughts are either the SPX and the Dow plays catch-up with the Nasdaq and the RUT, or the SPX and the Dow continues to consolidate sideways and until the Nasdaq and the RUT go on to record TD Buy Setups.
S&P 500 (SPX) LONG TERM OUTLOOK: BULLISH
Switch to neutral if all of the following occurs: SPX closes below 1848.36, Dow closes below 16457.66, Nasdaq closes 3771.48, and Russell 2000 closes below 1163.64 (updated April 2nd).